ABSTRACT We propose to determine how RNAi-mediated repeat and transposon silencing are controlled by long noncoding RNAs and by stalled spliceosomes, respectively. Small RNAs mediate the silencing of deleterious repeats and transposons, yet how such sequences are targeted for small RNA-dependent silencing is poorly- understood. Two yeast systems, Schizosaccharomyces pombe and Cryptococcus neoformans, offer powerful tools to address this central question. S. pombe utilizes siRNAs to silence repeats via histone H3 lysine 9 methylation (H3K9Me). The assembly of heterochromatin on transcribed non-coding pericentromeric repeats in S. pombe is triggered by RNAi but its spread and stability requires RNAi-independent mechanisms. Moreover, once silencing is initiated RNAi is itself partially dispensable. The RNAi-independent mechanisms were not understood. In our studies, we have identified a conserved sequence-specific ncRNA-binding protein, Seb1, that mediates the RNAi- independent pathway [Marina et al. (2013) Genes and Development 27:1851-6]. We also discovered that Seb1 functions by recruiting a chromatin-modifying complex called SHREC. Remarkably, simultaneous inactivation of the Seb1/SHREC and the RNAi pathways eliminates heterochromatin. In C. neoformans, RNAi suppresses the movement of transposable elements in C. neoformans. Here silencing appears to act via post-transcriptional mechanism rather than via chromatin silencing. Through a series of investigations, we have discovered that the stalling of transposon RNAs in the spliceosome is a necessary signal for them to template the production of silencing siRNAs [Dumesic et al. (2013) Cell 152:957- 968]. These studies reveal a remarkable new function for the spliceosome in transposon defense. We propose to capitalize on these discoveries to elucidate the molecular mechanisms by which repeats and transposons are recognized by RNA-guided genome defense systems. We have three aims: 1) Determine how Seb1 processes information to license RNAi-dependent heterochromatin assembly in S. pombe. 2) Determine how stalled spliceosomes trigger dsRNA synthesis in C. neoformans, and 3) Identify the signals and factors that tether SCANR RNA-dependent RNA polymerase complex to mRNA precursors in C. neoformans. Our studies will reveal how cells use the properties of RNA to identify and silence potentially deleterious elements in the genome. This work is important for human health because the inappropriate silencing of tumor suppressor genes is a key driver of tumor formation. Understanding the underlying molecular mechanisms may reveal new avenues for the development of therapeutics.